Carly Fiorina: Her HP record is a badge of shame

It is time political analysts take Carly Fiorina’s candidacy seriously.

With Fiorina rising in the national polls, up to third place in the latest Iowa poll and now primed for the main stage of the CNN September 16 debate of top Republican presidential primary candidates, it is important to examine her record carefully.

Never having held elective office or any role in public office, she anchors her claim on a reinvention of her actual record in the corporate world — as the failed CEO of Hewlett-Packard. The only time the stock jumped during her reign from 2000 to 2005, was when she was fired by a frustrated board led by chair Pattie Dunn.

Fiorina was not a rogue CEO plundering shareholder wealth, but still was a failed CEO, termed by many technology and business publications the worst technology CEO of all time. She sliced shareholder wealth in half in five years with stock value falling 52 percent under her reign. During this period, the S&P 500 fell only 6 percent and many technology stocks, such as Dell, did well; Xerox was up 75 percent and Apple was up 200 percent — not to mention the launch of Google and Facebook during this time.

Fiorina confused political reporters by arguing that she doubled revenues and increased worldwide employment, as she volunteered recently on NBC’s “Meet the Press.” I, along with scores of corporate governance experts, have raised challenges about her prominently failed performance leading HP since long before she became a politically active public figure.

Business reporters from Fortune, Forbes, Bloomberg Business Week, The New York Times, San Jose Mercury News and Computer World saw through this smokescreen and have revealed that this revenue increase doubled only through a controversial, misguided merger with Compaq Computer, which increased top-line revenues but not bottom-line costs.

At this same time, profits at other S&P 500 firms were up 70 percent, but HP foundered through the dead weight of the obsolete devices Fiorina bought from Compaq. Most of the businesses she bought were shuttered with the remaining ones divested by current HP CEO Meg Whitman. The jobs created were for outsourced, offshore work. In the end, she cut 30,000 U.S. jobs that never came back.

The colossal merger failure could have been avoided had she listened to her employees, industry analysts and her shareholders, who strongly fought the deal all the way to Delaware Chancery Court. With hardball tactics that would make Donald Trump wince, she rammed the deal through to the company’s and her peril.

The board at the time publicly and universally acknowledged the merger plan was a failure. Strangely, one board member who enthusiastically voted to fire Fiorina and one of her top lieutenants recently spoke in her defense, recanting their published, condemning statements at the time.

In fact, this heavy metal merger of hardware was just the reverse of Fiorina’s announced strategy at the time — which was to copy IBM’s move into software services. That led her to try to buy PriceWaterhouseCooper’s consulting business for $14 billion. She failed to close that deal and PriceWaterhouseCoopers consulting was bought, ironically, by Ginni Rometty, IBM’s consulting chief — now its CEO — for less than a third of what Fiorina offered.

I believe in redemption, but that must be earned by actions through contrition or exoneration — not by shouting your greatness into the wind. Sure, she is a smart, hardworking knowledgeable CEO who deserves another chance, but commander in chief of the Free World is not the next step.

Her defenders must acknowledge that it is interesting that in the decade after she was fired, she’s never been offered to lead a major public company again. Under HP’s talented current leadership, the firm has been rebounding, but not the record of Fiorina. When she stepped down as a well-paid board director of Taiwan Semiconductor, it reported she attended only 17 percent of the board meetings.

While not committed to any candidate, I am close to many Republican officials and impressed with the leadership accomplishment as well as the character of several current primary candidates. She is not one of them.

Similarly, there are many very impressive, distinguished, accomplished top Republican women leaders, such as Gov. Nikki Haley of South Carolina, former Secretary of Labor Elaine Chao, Sen. Lisa Murkowski of Alaska, Sen. Susan Collins of Maine, and Sen. Kelly Ayotte of New Hampshire. Carly Fiorina is not one of them.

Experience can be a badge of honor or a badge of shame. The reckless Capt. Francesco Schettino who shipwrecked Carnival’s Costa Concordia in 2012 off the coast of Tuscany, was one of the first to abandon ship leaving behind thousands of passengers. He will never be trusted with a public leadership role. Captains of industry must also be accountable.

Jeffrey Sonnenfeld is senior associate dean and Lester Crown professor of management practice at Yale School of Management. He wrote this for InsideSources.com.